Back when your parents retired, they probably had one or more pensions, social security and other savings. That used to be called the three-legged stool of retirement. Those days are gone for many.
And I think you have confused the tenets of the rule. I don't believe the rule as you wrote it makes any sense. If it did, then those who get little to nothing from Social Security need save little to nothing.
And I can't imagine such a rule was ever applied to someone wishing to retire at 50.
On MMM they sell their car and ride a bike or use public transportation. If they fly, it is probably free from some sort of credit card bonus signup thing they worked up.
On Bogleheads they don't fly first class, they charter a jet.
ER.org is usually a happy place between those two but sometimes seems to disparage someone who claims they can live comfortably a lowish amount.
I posted our possible budget not to say that is how we are going to live but to point out how cheap it can be to live (aside from health insurance, which right now IS cheap if you can manage low income....might not stay that way).
For the person who asked, we spent about $58k for the 28 acres. Eastern Washington is just silly cheap compared to the west part. Our forester even said we should log the lodgepole (leave the larch and fir) and get back about $8k!
According to the Schwab annuity calculator here:
Income Annuity Estimator: Calculate Your Payout | Charles Schwab
a male in California who puts 600K into an SPIA on his 50th birthday today will receive monthly payments of 3781 for 15-year certain and 3087 for 20-year certain, so the 17-year payout would presumably be around 3500 per month. No inflation protection, but beneficiaries receive any remaining income payments until the end of the period.
The bold is interesting. I think I've seen lots of posts here that say planning for retirement includes owning a paid for home. I recall very few that say the right strategy is to rent.Ideally I would love to have a 2-3M portfolio so that I could simply live off interest and keep my capital intact and feel secure for the rest of my life. But that is not achievable for most. In that case, the other option is to save whatever I can and live on that by 1) moving to a low COL area 2) not owning a home (to avoid unexpected expenses in repairs and to use that home equity to invest) 3) not spending too much on entertainment and buying stuff that's not necessary
- Sam
There is a wide gap between what is acceptable and what is desirable.
A burger on the barbie is acceptable but an occasional wagyu on the barbie is desirable -
How true! I suppose if we had been willing to leave where we want to live, stop going out to nice restaurants, and give up travel to exotic SCUBA destinations, we could've retired much sooner. We chose to continue working until we could afford to continue a lifestyle we think is desirable, plus have extra for the uncertainties.
I know there are a lot of well off people on this site, but it surprises me that so many think that $3900 a month is undoable. Millions of people live very comfortably on less than that.
Ya know, I'm starting to think if we need a subsection on ER for those of us who don't think we need over 1.5M to live a good life. Personally I think if you have a paid for house and live in a LCOLA and you want to retire around 50-55:
1. One can survive on $600k
2. $1M is a decent lower-end target
3. $1.2M is comfortable
4. $1.5M is plenty
Anything above is gravy though I wouldn't bust my behind to get there. You only get one life to live.
.....My intention is to come up with a reasonable number that actually works. 3900 per month is shocking for a few here. So many others felt that is a reasonable amount for a family of two (no kids) to live on. I agree about healthcare costs, the uncertainty of market and unexpected expenses. So may be 800K sounds like a more reasonable one then to retire at 50? ...
Ya know, I'm starting to think if we need a subsection on ER for those of us who don't think we need over 1.5M to live a good life. Personally I think if you have a paid for house and live in a LCOLA and you want to retire around 50-55:
1. One can survive on $600k
2. $1M is a decent lower-end target
3. $1.2M is comfortable
4. $1.5M is plenty
Anything above is gravy though I wouldn't bust my behind to get there. You only get one life to live.
Ya know, I'm starting to think if we need a subsection on ER for those of us who don't think we need over 1.5M to live a good life. Personally I think if you have a paid for house and live in a LCOLA and you want to retire around 50-55:
1. One can survive on $600k
2. $1M is a decent lower-end target
3. $1.2M is comfortable
4. $1.5M is plenty
Anything above is gravy though I wouldn't bust my behind to get there. You only get one life to live.
The OP is 37, married to nonworking wife, has 2 small children and rents. He seems to like posting hypothetical questions like the original post. He mentions retiring at 50 for 2 people with 600k. What happened to the 2 children?
I don't think most of us are saying the OP needs over $1.5M. $600K though is a bit light to retire so early.
Your reference is today's money. OP's reference is money 13 years from now. $600k maybe worth less than $400K today.
Can you survive on $400k today. Plus it seems to me you already own a home. I'm not sure OP does.
The OP is 37, married to nonworking wife, has 2 small children and rents. He seems to like posting hypothetical questions like the original post. He mentions retiring at 50 for 2 people with 600k. What happened to the 2 children?
This forum really demonstrates the wide range of what various people find to be an acceptable lifestyle. YMMV
You think folks should be able to retire early on far less? Why? It's not an accident that folks usually don't consider retiring early unless they are financially very secure. Once someone reaches 65/66 there are systems in place that help increase financial security greatly and makes retirement possible for many folks, but before that the risks are high and you need a good financial cushion set aside to meet them.I am a newbie to this forum. I saw threads where few people were saying they have 3M or more and still debating whether to retire or not. It just scares the heck out of me. There are so many people who are the sole breadwinners for the family or earn low and cannot even save more than a few 100Ks in their entire life. Good for those who have saved millions already but that shouldn't be the norm for wanting to RE.
- Sam
All of the above assumes that you can live in the lifestyle that you desire for $46,800/year in 2017 dollars.
Except NO inflation?? really is that feasible over 17 years to live with zero inflation? Again I repeat, not doable...and your still not making up that extra $400/month at the start.